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March 18, 2014

Fantasy Freestyle

The PFM, My Bid Limits, and You

by Mike Gianella

Throughout the positional tier series and continuing throughout my bid limit articles, some of our readers have been asking questions and raising objections along the following lines:

I don’t understand why your bid limit on Paul Goldschmidt is $36 in NL-only when the PFM only has him at $29.20. I know everyone is really excited about Goldschmidt this year, but I’m relying on the PFM for my auction and I don’t understand why there is a $7 difference between your suggested bid and the PFM’s. What gives?

For more than a few readers, I suspect there is a misunderstanding of what PECOTA/the PFM is designed to do versus what my bid limits are designed to do.

(Before you dive into this piece, I strongly urge you to read Rob McQuown’s 2014 introduction to PECOTA if you have general questions about PECOTA and the PFM. My article is not intended to reinvent the wheel when it comes to explaining PECOTA and the PFM, but rather to showcase the difference between PECOTA and my bid limits.)

As noted in Baseball Prospectus’s glossary, PECOTA has three elements incorporated into its projection model:

1) Major-league equivalencies, to allow us to use minor-league stats to project how a player will perform in the majors;
2) Baseline forecasts, which use weighted averages and regression to the mean to produce an estimate of a player's true talent level;
3) A career-path adjustment, which incorporates information about how comparable players' stats changed over time.

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Related Content:  Fantasy,  Auctions,  Bid Limits

23 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links


Thank you very much for explaining the differences in rationales between your bid system and the PFM. I also appreciate your sharing of PFM settings. The PFM glossary and tooltips are concise, but insufficient without more background information.

Mar 18, 2014 06:04 AM
rating: 2

Regarding the SGM button, considering the scarcity of SB and saves shouldn't you pay a little more for the players? I have seen many teams over the years who just punt those categories in order to 'save money'. Wouldn't overpaying for Kimbrel or Hamilton get you at least a few more points in the middle of the category that overpaying on Trout or Miguel Cabrera wouldn't? They aren't going to hit 30 extra homers but Hamilton (should) get 50 SB even if that's all he contributes.

Mar 18, 2014 08:48 AM
rating: 1

It's not a matter of paying a little more, it's a matter of acquiring too many. You want to get enough to do well in the category, but without SGP the PFM will try to help you own the category at the expense of others.

Mar 18, 2014 11:12 AM
rating: 0
BP staff member Mike Gianella
BP staff

The "market price" is already adjusting for this. Sinking 1/5th of your pitching budget into a non-elite closer in a 5x5 is quite a lot of money when you think about it. Spending more than that is where you run the risk of spending "too much" on a category.

Mar 18, 2014 14:45 PM

On PFM I set the inflation to 50% and it produces bids that I think will accurately reflect the prevailing market in my league.

Mar 18, 2014 11:02 AM
rating: 0

These are great rules of thumb, but the question I have is basically, why isn't this something the PFM is trying to do?

Or at least, why isn't there a setting to have the PFM do this? These don't seem like intractable concepts, mathematically - if they are accurate, then they should be measurable and the PFM should be able to compensate for it. So really, what is happening here is that the PFM is an imperfect tool because it makes projections and then treats those projections the way it would treat end-of-season data (and even there it does it poorly, because it doesn't account for time on the DL vs. playing).

It would be really cool if the PFM could be upgraded to try to incorporate this type of information. I see 3 main steps to this:

1) Deal better with PT uncertainty.
a) Projecting dollar value based on PT estimates needs to incorporate whether or not that estimate is affected by injury chances, job competition, etc. Hanley was worth a lot last season while he was playing. If he's projected to miss 100 PAs this season, those 100 PAs should be added back in at replacement-level rates when calculating his value.
b) Someone who might or might not play due to competition is a different story. They are a case of basically %chance to play vs. expected performance when they do play. So again, their total should be $10 if they have a 50% chance to be worth $20 and 50% chance to be replaced (as opposed to taking their stats, dividing them by 2, and then asking how much that player is worth)

2) Improved replacement level calculations for fantasy.
a) Replacement level isn't just the expected performance of the best guy just outside the top N. That's the easiest thing to calculate, but it's really pretty wrong. About 30% of the value earned by teams in my league last year came from guys who were not on teams to start the year.
b) The better calculation is basically, what is the expected production of all PAs/IPs that will actually be had by players in lineups. This is not easy to get at, but a quick improvement is essentially accounting for the fact that if we look at a points league with 200 hitters active, and hitters #196-205 are projected at 415-385 points, the expected earnings of that bunch is not 400 points/slot. It's a lot higher, because the 5 guys who do the best will get the slots.

3) "Spend all your money"
a) This is obviously more nebulous, but the idea here is basically this: when the draft is done, I should be able to judge how I did by adding up the projections of my players, and comparing that to the projections of players on the other teams.
b) The main thing that could be incorporated here is while inflation might cause the value of the last good shortstop to skyrocket, and paying that value would be correct at that moment, the better play would be to keep yourself from being the guy who ends up paying that. Overpay $5 for Hanley, so you don't end up overpaying $10 for Segura or Desmond. If this isn't already handled by valuations, it needs to be (and if it is, then you should never pay more than the PFM estimate unless you think the PFM projection itself is faulty).

Mar 18, 2014 12:58 PM
rating: 3

Couldn't agree more. The ability to place auction values on players in a systematic, quantitative way is a big part of what I thought I was paying for at BP. PFM is way overdue for upgrades before next season, and the comment above (and to a certain extent the article itself) illustrate some of the reasons why.

Mar 18, 2014 13:42 PM
rating: 1

I actually completely disagree. PFM takes the most likely statlines and compares them against the 288th best player in the pool to come up with values. Skewing it to a higher valued "replacement player" makes little sense and no other fantasy site does it that way. Padding stats for injury-prone players who *might* get a full-season of at bats makes less sense. Giving theoretical values to players who aren't likely to get called up (like Gregory Polanco) would just dilute the amount of money available.

FWIW, I think the SGP level and the centric inflation will already accomplish most of what you're requesting in this post.

Mar 18, 2014 14:31 PM
rating: 0
BP staff member Mike Gianella
BP staff

To adjust for auction realities, you would need a setting that applies "x" bid limit to "y" level of valuation, which i haven't seen in any projection system for fantasy. You would ultimately have to project the injuries we can't see coming in February to get Mike Trout and Miguel Cabrera to the $40+ they actually earn in the retrospective PFM and you would have to have an awareness of which hitters/pitchers would tank and be worth $1 or negative bids. The paradox is that while you could offer projections like this, the projections themselves would be silly even if in fact they made the PFM's valuation model. more "correct".

Mar 18, 2014 14:50 PM

I think this adjustment falls outside the projection system. The "correct" auction price for premium players really does exceed their nominal projected value. Similarly, the auction price for scrubs should be less than their projected nominal value.

I wrote this:
before I saw your comment. I think there is a real economic basis for the differences between auction prices and nominal projected value.

Mar 18, 2014 15:30 PM
rating: 1

Love this discussion, thanks for humoring me - this is exactly the sorts of topics I was excited to see discussed with the expanded fantasy coverage. Wall of text incoming...

Even though we can't predict who will be injured, who will have unexpectedly poor performances, and who will have unexpectedly good ones, we can still estimate the odds of those things occurring. Even if those estimates are useless/unreliable on an individual level, we could at least apply the aggregate chance to everyone.

What we would see, I suspect, is basically what you're describing in the article, but with the ability to more easily adjust to different formats/leagues sizes/etc. Guys who are close to but just above replacement level will have the bottom part of their performance curve cut off, and thus bleed value to the guys below replacement level (who would have even more of their curve cut off). Guys like Trout and Cabrera would lose no value (except to the injury chances), and you could calculate the built-in inflation by looking at how much value you were projecting for the below-replacement guys.

For example, there are about 9350 runs, 8800 RBI, 2300 HR, 1700 SB and 17800 hits to be had from above-replacement players in a 12 team yahoo standard league (which has 10 hitters and 8 pitchers per team), according to the PFM. If I go down to guys worth at least -$3, the totals increase to about 10000 R, 2450 HR, 9400 RBI, 1800 SB, and 19000 Hits, representing 10 more hitters (at an average of about 65/14/60/9/129 in 496 ABs). If I go up to >$1, I cut out 10 hitters, who perform at an average of about 68/16/64/13/129 in 496 ABs. Now a full analysis would know the real projected distribution of each stat for each player, but just as a wild guess, let's say that the difference in the average stats equals 1 standard deviation. With that assumption, we are saying that about 3 of the hitters in the sub-replacement 10 will out perform the 3 worst of the above-replacement 10. The level of performance will therefore be the average of the top 7 players in the first group + the top 3 in the second group (to a first approximation). So this ups the overall totals for this group by 12.5 R, 8.5 HR, 17.4 RBI, 13.4 SB, and 2.2 hits. That ranges from 1-6% for the counting stats, and a lot less for the hits (which is a sub for BA), but more importantly it told us that the ~7 positive dollars assigned to last 10 hitters should really be more like $4.90 (the 7/10 guys who won't be out-produced). Since you can't actually spend the extra $2 on guys beyond the roster size, it naturally gets spread to the rest of the guys in proportion to how good they are (with Trout and Cabrera getting more of it than anyone else).

I'll note here that I tossed in some numbers to make the math easy that aren't really good numbers to use - the +$1 / -$3 barriers were totally arbitrary, the assumption that they represented 1 standard deviation of performance is almost certainly not true, and treats the stats as composites, instead of looking at each stat individually is obviously a bad way to do it. But hopefully this outlines the general approach I'm talking about. Would be cool to see it applied to the PECOTA percentile performances, but I don't have any good way to do that without a whole lot of manual data entry.

Mar 18, 2014 22:01 PM
rating: 0

But Mike, PFM already has the Aggressive/Conservative slider, couldn't the same logic be pursued even further to include an appropriate amount of over-bidding on elite talents?

Here is the problem I find myself with -- I can easily take free projections very similar to PECOTA's for every player in the league, rank hitters/starters/closers in the right order, and then just apply the 1st/2nd/3rd/etc highest bids from tout wars or LABR for the same category of player. The weakness of that approach is the difficulty I would have in accurately assessing the relative value of SB vs HR, of saves versus ERA contribution, etc. Another weakness is knowing whether the internal dymanics of those auctions caused errors to be made in the distribution of valuations (stars/scrubs vs balanced). How do I value roster flexibility, probable replacements for injury-prone guys, etc. Those hard questions are where BP fantasy can really add value for a veteran player. But, if PFM does a bad job of valuing catagories relative to eachother, and doesn't even attempt to do the other things, then I guess I shouldn't be using it.

Mar 19, 2014 05:59 AM
rating: 0
BP staff member Mike Gianella
BP staff

The Aggressive/Conservative slider has the same problem that the PFM does. Even with the SGP turned on, it adds more money to SB/saves guys at the top than it does to the power hitters/ace starting pitchers.

Mar 19, 2014 06:15 AM

Are the denominators used in the PFM's SGP formula available anywhere on the site? I couldn't find them but am interested because I've noticed the SB and Saves issue as well.

Mar 18, 2014 13:06 PM
rating: 0
BP staff member Mike Gianella
BP staff

Not that I am aware of, no.

Mar 18, 2014 14:51 PM

It's a preemptive response to the late inflationary pressure in an auction draft. The glut of late round $1-$2 bargains (relative to nominal value) produces de-facto retroactive inflation among the rest of the player pool. If you won't pay more than $25 early in the draft for a player that PFM values at $25, you are failing to take into account the retroactive inflationary pressure that happens at the end of every auction draft since the dawn of time.

Mar 18, 2014 13:54 PM
rating: 5
Matthew W

Here's the problem with PFM in an auction setting:

Inflation occurs during an auction, EVERY auction, as a result of variations in evaluation. In order to purchase a player, you must (in general), bid MORE than 11 other owners have a player valued at. Therefore, you are creating inflation for every other valuation, even if YOU think the purchase is at value. This effect is true for every early purchase, before position scarcity and reduced $$$ reduce inflation.

Which means, that inflation ALWAYS occurs, so the $2 bargains are not bargains because 11 other owners made mistakes, but because a different evaluation tool was used early. So even if EVERYONE thinks a $6 player is worth $6, there is never enough money left to allocate to all of those players.

The question is, should we use the PFM to adjust for that, or is that the owners responsibility?

The above point about adding Replacement level value to Injury risks is a good one, the argument could be made for any Minor Leaguer, or part time player. But the problem is, this is fine on a micro level (fixing hanley) but if we fix EVERY part time/injury player, what the hell is going to happen to the over $$$...

Anyway, PFM needs some modifiers for replacement levels, and theoretical auctions, because this year it is just Out-To-Lunch, much more than any other year I've seen.

Mar 18, 2014 14:34 PM
rating: 0
BP staff member Mike Gianella
BP staff

I recommend adjusting for these in-auction fluctuations on your own.

The problem with relying on an in-auction tool is that in an auction with 20% inflation if the first 40 players cost $80 over the tool's price, then you are tricking yourself into thinking there will be deflation in your auction. But that's not really how it works, because teams still have the same amount of money to spend and will keep "overspending". Every team in the league will keep spending at the 20% inflation rate, but you'll wait and wait until it's too late and leave a lot of money behind. I've seen it happen and it isn't pretty.

Mar 18, 2014 14:54 PM
BP staff member Mike Gianella
BP staff

My argument is that it's the owners' responsibility. No matter how many mechanical adjustments you make, no projection system is ever going to be able to account for all of this correctly.

Mar 19, 2014 06:11 AM

MG: "My bids do something that the PFM cannot: adjust for the real world dynamics of a fantasy baseball auction."

When you buy a Jeff Keppinger type player, there is a very real risk that he will play his way off your roster. I am tempted to call that an "opportunity cost", but I could be mis-using the term. In other words, low-end players should be valued for even less than their meager projections, because you will likely need to spend more to fix your roster. A failure to meet nominal performance requires replacing them.

The top players, may not meet their nominal dollar values, but they will still provide decent performance. That certainty is worth a premium beyond their projected value. Their roster spot is in good hands.

I think this explains the "retroactive inflationary pressure" coined in an earlier comment.

It would seem possible to build that kind of auction price adjustment into the PFM.

Mar 18, 2014 15:11 PM
rating: 0

So I thought last year when I had Braun, Stanton, and Kemp in an NL-only; luckily, I scratched out fourth place...

Mar 18, 2014 16:38 PM
rating: 0

Not sure I agree. In fact, you NEED some low-value players to play their way off your roster quickly so you can have FA flexibility early in the season. The ones who kill you are those late and mid round picks who chug along at 70-80 percent of predicted production so you don't have a clear rationale to drop them.

Mar 19, 2014 10:38 AM
rating: 1

During the course of the year 2430 wins will be obtained by some pitcher. Someone has to get the win correct? Due to the conservative nature of the software the SP have what seams like low win totals. Is the PFM a zero sum game and so have all the "Win" stats allocated to some pitcher? if so who if the PFM being bullish on? RP's or SP's out of the top 50? Thanks.

Mar 26, 2014 12:07 PM
rating: 0
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